The Guy Who Turned Down $500 Million For His Startup Just Landed A $1 Billion Valuation

Ryan Smith, CEO of Qualtrics, feels validated. Investors
just told him his company was worth $1 billion, and they ponied
up another $150 million in a series B investment to help him grow
it even bigger.

That brings total funds invested to date to $220 million.

Two years ago,
we reported that Smith took a giant gamble on himself and his
family-run tech company. After about a decade of hard work,
Qualtrics had bootstrapped its way into a profitable company
generating just under $50 million in revenue, Smith told us. In
2012, he had about 200 employees and 3,800 customers.

And it was on fire.

Venture capitalists noticed. So did rival companies. At one
point, he had a fistful of term sheets from VCs in one hand, and
a $500 million acquisition offer in the other.

Qualtrics lets companies perform sophisticated employee and
customer surveys in the cloud. The tech was created by Smith's
dad, Scott Smith, a well-known professor of marketing at BYU's
school of business.

Smith's older brother, Jared, was also a big name in tech. He had
left his prestigious job running Google's Chinese technical
operations to become his brother's copilot, running Qualtrics'
engineering.

Their marketing was brilliant. With the elder Smith's name and
connections, the Smiths targeted universities. "We signed up
every business school we went after," he said. Thousands of
marketing students learned to use the research tool in school and
then brought Qualtrics into their companies when they get hired.

When the Smiths were deciding their future, Sequoia's Mike Moritz
— backer of Google, Yahoo, and PayPal — swept in. He looked Ryan
Smith in the eye and told him a half a billion dollars was
nothing compared to the multibillion-dollar
company Qualtrics could become.

Smith was 33 years old, and he turned down the $500 million
offer.

Good choice.

Since then, revenues have grown to "over $100 million," he told
Business Insider. He currently has 6,000 customers and 550
employees, and the company is expanding nationally and
internationally. He just opened an office in Dublin, with offices
in Sydney, Seattle, and Washington, D.C., on tap.

"As a founder, you're either the type that gets invigorated with
every milestone, or you get less interested. For me the bigger we
get, the more scrappier we get, the hungrier I get," a jubilant
Smith told Business Insider.

"I have to keep telling myself to look around and enjoy this," he
says. "We sat in a basement and bootstrapped for 10 years so we
can do this, be here. Now we have bunch of money, a ton of
customers, and we're dominating our market."